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How does a land contract work? Include rights and responsibilities of parties. Scenario:An investor finds a property that has an annual net operating income of
- How does a land contract work? Include rights and responsibilities of parties.
- Scenario:An investor finds a property that has an annual net operating income of $90,000 and is seeking a 30-year bank loan at 5% annual interest.The bank has a Debt Coverage Ratio Requirement of 1.4.If an owner wants an 8% return on equity a) what is the maximum loan that the lender will make and b) what is the maximum price the investor should pay?
- If the fair market value of the property is calculated at a 7% CAP rate, will the bank still make the loan identified in #6 if they will loan a maximum of 70% Loan to value?
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Business Law Text and Cases
Authors: Kenneth W. Clarkson, Roger LeRoy Miller, Gaylord A. Jentz, F
11th Edition
324655223, 978-0324655223
